Stocks Slip as Investors Brace for Earnings Season

NEW YORK ( TheStreet) -- Major U.S. stock averages slipped for the second straight day on Tuesday as investors waited on the sidelines for the unofficial start of the earnings season with a report from aluminum giant Alcoa(AA) after the markets close.

The Dow Jones Industrial Average fell 55 points, or 0.41%, at 13,329. The blue-chip index posted its third day of losses in five sessions but remains up 3% since the start of the new year.

Verizon shares were off 2.4% after CEO Lowell McAdam told The Wall Street Journal that he believes the company can feasibly buy out its wireless joint venture with Vodafone(VOD) .

The winners included Exxon Mobil (XOM) , Hewlett-Packard(HPQ) and Home Depot (HD) .

Shares of Alcoa were up 1.2% in after hours trades after the aluminum products producer posted earnings of 6 cents a share on $5.9 billion in revenue and said it expected a bump up in global demand. Consensus among analysts had expected 6 cents a share on revenue of $5.61 billion.

The S&P 500 was down 5 points, or 0.32%, at 1457. The Nasdaq slid 7 points, or 0.23%, at 3092.

Except for health care and transportation, all sectors in the broad market were weakening, with capital goods, consumer cyclicals, conglomerates, and energy sinking the most.

Apple(AAPL) shares were off 027% as investors took profits following a pop in the stock amid a DigiTimes report that said the tech giant is developing a low-cost iPhone for emerging markets for 2013.

There were also reports that Apple CEO Tim Cook made his second visit to China in less than a year and met with the country's ministry of industry and information technology.

Volumes reached 3.59 billion shares on the New York Stock Exchange and 1.74 billion on the Nasdaq. Advancers were marginally ahead of decliners on the Big Board, while winners beat laggards by a 1.1-to-1 ratio and the Nasdaq.

Jeff Kleintop, chief market strategist for LPL Financial, said this week investors will begin to see whether fourth-quarter corporate profits suffered any collateral damage from the "fiscal cliff" battle.

"When the earnings season winds down in February, the fiscal cliff battle part II may emerge as we approach the limit on U.S. borrowing authority, the end of the delay to the spending sequester, and funding of the U.S. government," said Kleintop.

"Starting Tuesday afternoon, with Alcoa's Q4 earnings report, corporate fundamentals will start to matter again -- if only briefly," said Nicholas Colas, chief market strategist at ConvergEx. "U.S. companies have proven time and again over the last four years that they can deliver strong bottom-line results in spite of a tepid global economy. The market-moving information will, instead, be at the top of the income statement -- as it was during Q3 2012 season."